What Can Small Local Businesses Do To Compete With Giants?

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There’s an article in the September issue of CNNMoney that fires up the imagination. It’s about a competitive challenge, which points our thinking straight to Strategy.

Click the link below to read this article, “Local Shops Fear Amazon’s Expansion,” by By Jose Pagliery: http://money.cnn.com/2013/09/04/smallbusiness/amazon-expansion/index.html?iid=SF_SB_Lead

This information-packed article describes Amazon’s aggressive growth plans and its capacity to provide customers with both low pricing and fast delivery.

The emergence of Amazon and other giants is certainly a significant concern for small business leaders. We’ve learned from the past that business strategies must be continually reviewed, adjusted and re-shaped based on changes in technology, competition, customer needs, and a host of other factors. All of us probably remember the time-honored example of the extinction of specialized Buggy-Whip manufacturers from days of old.

Once the chaos of fear dissipates, clear thinking can prevail, and leaders can begin the work of changing and even transforming the business strategy.

So, what first step might a small business take? First, let’s recognize that small local businesses each have something special and unique to offer that their competitors, whether small or large, don’t have. That special something needs to be identified, and utilized to re-identify the target customer base. The fundamental question still applies: Why do our customers buy from us? Answers to this question will describe the unique value that your business delivers that prompts your customers to take money out of their bank accounts and put it into your coffers.

There are typically three alternatives from which to choose the unique, core value a business will provide to customers.

1. Lowest cost, no hassle purchase and delivery
2. Latest and greatest, leading edge products and/or services
3. Individually tailored products and/or services for each customer

These three focus areas are pretty different from one another. Only one spotlights cost, while the other two zoom in on specific qualities. Businesses need to do an adequate job in all three areas, of course, but they need to choose only one as their cornerstone — their unique difference — to differentiate themselves from the competition.

When you differentiate in ways that meet and exceed the needs and wants of your chosen customer base, you’re ready to move forward to align your people, activities and processes, organization-wide, around delivering that unique value.

Today’s Challenge Questions: Is your business threatened by new competition? Have you re-visited your strategy in light of competitive threats?

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